On the flip side of things, you sometimes have companies that decide to go 'private,' like Elon Musk said he wanted to do with Tesla. The company initially attracts investments or seed capital from the co-founder, friends, and families.īusiness investors such as venture capitalists, private equity companies and angel investors pump in money if they are optimistic about long-term prospects and sustainability of the company. Prior to going public, a company is a privately-owned firm. It's a fabulous funding source for a company. So when a company does go public, the valuation usually spikes dramatically-and the company can now use the funds from the sale of shares to feed the business. In other words, this is the moment when a private company goes 'public' by offering its shares for sale to the public. In technical terms, an Initial Public Offering (IPO) is the first sale of stock issued by a company to the public. The investment bank, in its own statement released to the media, said it was “pleased” with the settlement. “Morgan Stanley is committed to robust compliance with both the letter and the spirit of all applicable regulations and laws. “He not only rehearsed with Facebook’s treasurer who placed the calls to the research analysts, but he also drafted the majority of the script Facebook’s treasurer utilized when calling the research analysts.” “Morgan Stanley’s senior investment banker did everything but make the phone calls himself,” Massachusetts Secretary of State William F. That, in turn, prompted a number of analysts to lower their expectations for Facebook’s financial performance.Īn investment banker in California not named in the official settlement (who the New York Times identified as Michael Grimes) is accused of being personally involved with the decision to not only make the S-1 filing, but also the decision to communicate new information to analysts. The investment bank was the lead underwriter for the IPO and had been accused of improper influence between its bankers and research analysts who cover Facebook.īefore Facebook’s much-watched IPO, the company issued an amended prospectus (S-1 filing), which indicated a lower revenue model.

To put that fine in perspective, Morgan Stanley’s Q3 2012 net revenue was $5.3 billion. The deal, announced Monday, is a settled amount the investment bank came to with state regulators-neither admitting nor denying guilt. Massachusetts has issued a fine of $5 million against Morgan Stanley (PDF) over improprieties during Facebook’s initial public offering (IPO) earlier this year.

Facebook ipo prospectus pdf